202."Underflexed" and "Overflexed" Markets - Ben Wright, CEO of Upsuite, Shares Coworking Market Data

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202."Underflexed" and "Overflexed" Markets - Ben Wright, CEO of Upsuite, Shares Coworking Market Data

00:00:01 Welcome to the everything co-working podcast, where you learn what you need to know about how the world wants to work. And now your host coworking space owner and trend expert. Jamie Russo. Welcome. Welcome to the everything coworking podcast. This is your host. Jamie Russo. Thank you for joining me today. I'm excited about today's guest. Ben Wright is the CEO and founder of upsweep and online platform to help individuals and teams find workspace and a place to connect,

00:00:42 meet, and work. You should list your space on ups suite to get access to leads that don't come through your own website or your Google, my business website. That's a no brainer. The other reason to pay attention to platforms like upsweep is that they have access to in this case, north American demand data, transaction data and pricing data. They see macro trends that individual operators simply don't have access to their published insights are invaluable.

00:01:09 Make sure you check out the upsweep blog. My conversation is with Ben is super interesting. We talk about the coworking and flex demand numbers by major markets based on up suite data, which markets are over flexed and under flexed based on demand by location data, why people are going to the office, what drives people to leave their office and how operators can leverage these insights for marketing messages.

00:01:34 Ben talks about his recommendation for product mix in order to match the demand that they see on their platform. Andy talks about, he thinks we're going to see a tremendous shift to management agreements, and he thinks that if you're listening and you survive 2020, you are probably here to stay. So before we jump into my conversation with Ben, we recently released our 2021 co-working tech and tools guide.

00:02:01 If you haven't yet grabbed your copy, you can get a copy at everything co-working dot com forward slash tech and tools. 2021, I dove into a deep dive of their results. On a recent episode, the guide is organized by tech and tool buckets, such as marketing member billing, conference room reservations, mail client lead gen partners, platforms like upsweep,

00:02:23 et cetera. It's based on results from a respondents of the survey we distributed in December as well as top picks from the everything co-working flight groups, community manager, university, and our mentor program. So again, you can grab your copy at everything co-working dot com forward slash tech and tools 2021. And now for my conversation with Ben, Ben Wright, thank you for joining me today then is CEO and founder of upsweep.

00:02:50 So Ben, we have a beefy list of topics today, and I already know we're going to run out of time. So I would love to hear your background. So we were pre chatting and I gave you some of mine, but I said, okay, let's record that because I don't know. How did you tell us about upsweep tell us how you got into it and kind of what your mission is.

00:03:09 And then we'll, we'll do kind of a, a dive into what your data's showing is happening out there. I'm excited to talk about that. Totally. Well, great. Great to be here. Thanks Jamie. So sweet is a, is a network of 50,000 plus rentable office spaces, including now conference rooms really focused on suites and that kind of main unit where operators make money,

00:03:34 which is suites of two, three, four, 10 folks. And we're in north America. So throughout, throughout the U S and Canada, and have about 2,500, what we call verified locations. So we have contracts with and work with including lots of all the big ones and many, many, many of the small ones, about 300 different operators.

00:03:54 So my background, how I got to this is I'm a, I'm a city junkie. I I've been to all 50 states, 30 countries. And previously I was an executive in a digital marketing company that focused on how companies locate. And so we recruited companies to places all over the Western hemisphere, using digital tools, really found coworking through that as a member and moved my company into it,

00:04:21 fell in love with the industry and the people that are in it. What, what I think we might talk about today is my, a little bit more, my geeky side, I was quantified, I was a quantitative economics major and urban studies minor in college. And so just applying Was that as an undergrad, I'm so fascinated when people get that specific.

00:04:41 Like how do you know that when you're 18? Honestly, I, I met with a professor my freshman year and that professor said, I was thinking about political science or philosophy. And the professor said, well, do you want to make, you know, what do you want to do? And I sort of just want to make an impact when I was 18 years old,

00:05:02 that's all I could come up with. And what he said as well is you need to understand numbers and quantitative. Cause if you don't, if you do, people will, can argue with your outcome, but they can't argue with your methodology. And it sounds super geeky, but I really got way into it and apply that thinking to cities and now coworking.

00:05:23 And, and it's just, you know, if you've talked to my wife, she'd say I'm a big nerd, who's a nerd about cities and a nerd about real estate. So that's how I Got, so here you are. So, and you're in Boulder, Colorado. Yep. Yep. Set some context. Where's your team? So team is in Colorado.

00:05:42 We have marketers and developers in Europe and accountant in Canada and CTO in Canada. And so, yeah, kind of a core team in Denver, but we're really spread out and working in the fashion that we recommend to our Working anywhere. I love it. Yep. So we were chatting about what to chat about today and I love our saying, look like let's not talk about the things that everybody's heard a hundred times,

00:06:08 but also you have actual data on what's happening in the marketplace because of your platform. So I would love to hear your perspective on, you know, what just happened and, and where are we going and what are you seeing start to emerge, like hit a couple of macro points. And then you also, you know, proposed a little bit of perspective from the occupier and kind of how you're talking to the occupier about their,

00:06:34 their options and how to think about, you know, where they can be in, in workplace today. So I'd love to talk about that too. Cause I think we don't often sort of get into that occupier mindset. So yeah. Tell us what you're seeing. So I'll give a little bit of context. So we, when I started the business,

00:06:54 we, we really wanted to get to know coworking as an industry. And what we really took away is that coworking and flexible office operators need new members. That that's the main thing. And so that's what our business is about. And we spent really the first two years really focused on just that, but about six months, nine months before the pandemic,

00:07:14 we asked operators what more we can do. And, and we realized we were sitting on a lot of data, data about demand and who's looking where, and when, and for what supply, like what's available, how many seats are they? How many square feet is it pricing to? What, what are people charging? How's that changing as, as we talked in preparation for this,

00:07:36 there's so much fluctuation in the flex office world. So, so we were building all of this data before the pandemic. And what that's given us is this incredible lens to look through, look at the pandemic and the interest and, and the impact it's had on this industry. And so, so we're, we've, we've just recently launched a new market product that,

00:07:57 that has that on our flex office pro platform, we offer this data to operators as well for their location. So a lot of what I'm going to be talking about today is just, just coming from that. So, so, you know, high level, just, just talking about demand, we saw some really interesting things in our business. Number 180% of the transactions that we have teed up in March of 2020 to close either went away forever or went away for a while.

00:08:26 And so we, I remember sitting and I think a lot of operators can, can relate to this in late March 20, 20 planning our marketing plan for to, to the demand side and thinking, holy moly, like what, what do I have to say? What do I have to say if I'm not selling offices? Right. And so, you know,

00:08:46 demand really shifted, you know, our revenue went down like it did with a lot of folks, but it forced us to really learn about what remote work is when we started writing about it. And, and we never thought of ourselves as an expert in and remote work, but where that, where that's actually come full circle now on the demand side is we think are what we're doing as an industry.

00:09:09 And what we're doing as a company is helping members engage anywhere. People, people talk about work from anywhere, but why are they going to an office if they can work from anywhere? Well, they're going to an office to engage, to engage with people, to engage with their coworkers, to engage with collaborators and clients. And so we recently rolled out our,

00:09:30 that new branding, which is engaged anywhere. We're, we're really excited about that. So, so some of the numbers just getting into data about demands definitely went down, but there were these interesting spikes in Q2, in a lot of markets, people saying, okay, the pandemic's almost over, we're talking to June, 2020, I need to look for space.

00:09:55 And so we saw a lot of interest and there was always a lot of excitement, Q3 kind of similar. And what we saw as is most of the demand we're seeing was, had gotten much smaller. So we'd been used to seeing four, six, eight seats that that's kind of how we built the company. These were one and two seats, people saying I just have to get out of,

00:10:17 out of my house. Right. And that demand really continued until really that'd be wary with, with the exception of two markets. We saw Houston really spike in Q4. We're talking about that ahead of time. And we saw Washington DC really spike due to the, the, you know, the changeover in administration that, that led to a lot of really interesting activity in those two markets,

00:10:39 one of the other, and we look at this differently. We, we have a whole other sector of enterprise demand too. So we have a demand that comes through our marketplace. That kind of is always there. But 10 different companies ranging from, you know, 700 employees to 25,000 employees came to us during the pandemic and said, can you manage our flex inventory?

00:11:01 This is something that we don't know if the traditional market can really do it, we're really interested in it. And that was a real surprise. And so what we saw as an enterprise is really seriously planning for flex. And some of them are transacting right now, but most of them have long leases, you know, three, three more years or so,

00:11:23 but they're all at least two thirds of the large corporations that we've talked to. And obviously all of them that we work with are really making big moves to flex. So that those are kind of the demand trends overall. And what we've seen from that side, I want to highlight a couple of things though, that are, that are really interesting from the data.

00:11:42 So one of the, one of the things is that it's just how different this is per market, right? So, so I talked about Washington DC, as an example, I'll kind of share this cause we're, we're going through this now. The, yeah, let me take a look. So, so Washington DC. So, so overall data-wise,

00:12:01 this is kind of what we saw. We focus on, on a metric that that is only a nerd to love, but I think people like it, we want them to try to figure out how can we measure demand as an operator might feel it in their space. Like, so not something like Google might do, which is like how many people are searching for stuff,

00:12:21 but it's, it's something that would really tie to what they do. And so we came up with this thing called demand per location, right? So, so we actually look at how much, how many views there are per location on our platform. And so, so to talk about this and again, sorry for the nerdiness, but demand per location,

00:12:40 sell each, each quarter from Q1 to Q2 Q3 bottomed out in Q4. But here's the key that rose 24% in Q1 compared to Q4 some of that seasonal, but more of that is COVID. So the idea, so why am I mentioning this? Is that that's a good benchmark for operators as they're looking at their own web traffic to say, Hmm,

00:13:05 you know, I know my traffic's up, but is it, is it up more than 24%? Is it up less than 24%? And they can tell in their market and what their business, if they're actually doing better than the market or less. So now they're also, so I think that, I think that's, that's one interesting case. That's,

00:13:25 that's actually across north America markets across, across north America, all locations, all 2,500 locations. Right. And I am in a market. Most people probably know this, but yeah. Moving slower or not. But, you know, I think I'm fascinated by your operator data because this is the struggle. We talked about this a little bit beforehand, you know,

00:13:47 the average operator listening, you know, knows their own business and doesn't know how to compare my doing well, am I not doing well with it? You know? Right. What is, is my web traffic good? Are my, is my conversion rate good? Like they don't, they don't know. It's something I've been thinking a lot about too.

00:14:03 So one of the, this is something we've talked to a lot of operators about who do secret, or really you did a pre COVID secret shops and send people out. And so the first product we developed for operators allows them to not only look at their own location, but look at the three closest locations to them and compare a bunch of things, demand,

00:14:26 pricing, all kinds of things. Why we did that is what we found is, is our customers choose a location before they choose a brand. And so, and location, location matters. You know, it's one of the old things about real estate that hasn't changed is that location really does matter. And so one of them, we encourage operators to look at one is,

00:14:47 is use our data because you can, but to look at the operators might look different than you, or they might not be the big guys, but they're near you because they are who you're being compared against. And so that's something we learned early on that, that I thought I'd share with the group to go back a little bit. Like I want to dig deeper and to have a think about maybe what's going on.

00:15:10 And so operators can think about their local market a little bit. So I mentioned DC, one of the things that's true about Washington DC, it was, it was one of the two hardest markets for operators to succeed in pre-coded. The other one was LA and mostly downtown LA. And I won't go too deep into both, but those were really hard markets for,

00:15:30 for operators. And so if you look at DC today, I, I think I mentioned to you that the change of administration really drove kind of an early recovery compared to many others, but demand is, is now higher than pre COVID levels in DC. It's one of the few markets that that's true. So it's like, whoa, wait a minute.

00:15:51 That that's significant, but here's the kicker with 20% less flex inventory, they'd have to have so much, so many quotes Closures make offices. I think some of that's been taken over, but yeah. Right. So what that, what that means is if you're an operator in a market like that, you've got a really hot demand market and you've got 20% less competition that actually makes a market like DC,

00:16:17 a really good opportunity. And so we have that type of information for a lot of different markets and that's, that's been interesting for us to do consulting work and help operators, help brokers, help advisors really think about, Hey, where should I be paying? Where should I be putting my, how should I be planning? What does success look like?

00:16:37 So on and so forth, how Should I be pricing in a market like that? You know, and under priced, you're not aware of that demand is yep. It's yeah. That's an interesting market because it has so much commercial, you know, the government and it is a big commercial market, but probably less flex historically because the government, I think they're starting to flex.

00:17:00 So that's an interesting shift. We do get a lot of questions about is the market over flex or under flexed. Right. So how, we're kind of looking at that as it's square footage allocated to flex compared to the overall market. So I'll give you an example that the two kind of most over flex markets that we see are Denver and Austin. Oh,

00:17:22 I thought you were going to say Dallas. That would have been my guess. Huh. Interesting. Okay. Well, so part of it is I think a lot of coworking operators look at the lifestyle of those two cities that I happen to be in, in the Denver area and think, oh, that's perfect. And it's made both markets kind of challenging,

00:17:37 to be honest, if you're an operator on the flip side, some of the more under flexed markets are places like Houston, like Houston is a huge city with tons of office space, but not that much flex. And so what we saw as per location demand in Houston really skyrocketed. And I think that was part of the reason is there's not as much flex as a percentage of the office market there.

00:18:01 So those are, those are interesting threads. Yeah, totally. So I dive into something. So I had come across an article that you wrote about the type you didn't write it, I don't think, but your team about the sort of type ologies and you brought this up at the beginning of our talk, why are people going to flex? Right.

00:18:19 So that, you know, some of those spikes we're seeing, what are people doing? And I, you know, had said to you, well, this is super interesting to me because I think coming out of COVID, this is a challenge for operators to sort of harness that like insight into, well, why are people going to come in? Is it the same as it always used to be?

00:18:39 And how do I message around it? Because you know, does, does the consumer know why they need a hot desk, you know, or a dedicated, you know, how, how do you think about what they're using this space for and how do you connect the dots for them? Yeah. I'd love to hear, have you kind of share a little bit about those typologies,

00:19:00 if you want to kind of dive into, into those. Totally. Yeah. So this is a huge passion. This is like a, if the other stuff was my left brain, this is like, right. Brain, gosh, what do I like as a consumer? What do I like as a human? What, what our customers like and our members like,

00:19:17 so this is a really fun segue. So we started thinking like, okay, if we're in a remote first world, right. Cause I believe we are right. We certainly are today. And we have been over the last year and I think, I think businesses and companies need to make the case about why people should come back, not the other way around.

00:19:34 Right. Because it's worked better than most people thought to work remotely. And so my, you know, I'm, I'm, my generation is the generation where the movie office space came out and, and like, you look at, you look at the stereotypes of kind of tired old offices and who, if they have the choice, who's coming back to that,

00:19:54 right. Seriously, like where you have to fight over a stapler and stuff like that. Right. So, so that this was really fun because it really got into why we all like co-working and flex in the first place. And you can see the background I'm using. So pretty cool space. So what we started thinking about is, is what if an office needed to be created like a product,

00:20:14 a product that meets a need for humans, for companies, as opposed to something we have to do, it's something we want to do and actually needs to mean. So we, we started with that and we realized there's just not that much out there for that. And so, so essentially we, we did a lot of research and, and brainstormed a bunch of as a team and,

00:20:34 and created what we call these type apologies, which, you know, actually credit to one of the, some of the coolest stuff we saw was actually done by the team at breather. And that team is no longer providing space, but that's some of the thinking that they did was really cool and also credit to we work. Actually, we work has done some pretty cool work on this too,

00:20:54 but here's kind of what we not to mention JLL and others. So, so we borrowed a lot from companies that we know and work with and, and talk to a lot of people. And essentially what we came up with is there are a few key needs, but, but all of this is driven by number one, the commute, the commute is the thing that has,

00:21:15 that means we're never going back to where we were meaning. So like we had, we did it, we did some research with our, our clients and they all agreed managers and employees that look as a manager, I don't need my people commuting. And as an employee, they all said, I don't need it to you. And the reason why is employees basically gave managers the time that they would commute work time.

00:21:40 Right? So companies are going to take that deal. Right. And so both sides are going to take that deal. You've got to have this, you've got to have a reason to come that's compelling. And so, so we kind of, we came up with these different needs, right? So, so needs like collaboration actually, CVRE did some good research on this too connection culture,

00:22:04 obviously commute. But then there's this other one, which is having just an alternative to working from home, just getting out and not being, not being home. Right. So all those things, we kind of mashed together and, and assemble the back in a typology. So someone type apologies the hub, like that's the, that's the place where you experienced the brand of your company,

00:22:28 right? And they're kind of high level strategic decisions about products and, and things like that that are, that are done. It's not as much armies and armies of people, but those are that's where executives and project and product leaders live or work more appropriately. Then there's this next class. Then there's this next class of space. And we, we intentionally divorced this from like particular kinds of real estate to keep it more as a,

00:22:59 as a need meeting a need, the next I call these or connect space, Hey, I'm going there maybe two days a week purposely to connect and collaborate with, with folks. Right. And what we found is that can take a, that could be an office that you have full-time, or it can be a conference room network, right. Where you're essentially getting together a few hours a week,

00:23:22 you know, on, on a day or two a week. And that's it. So connect spaces or are aware of this collaboration can happen. Your article uses the word T-minus, which I kind of love Sean Paul wire coat. That was her word on that. And it was great. She was like, huh, not seeing that. Should I keep that?

00:23:45 Should we keep that? And then I'm really glad we did. And then the, the next one is what we call a ghost space. Yeah. I just, it's just me. I'm going to, I need to go somewhere. That's not in my house. So essentially it became hub connect and go. And we also talked about virtual, but I think in terms of,

00:24:06 of what we learned during the pandemic is that the office is going to go through this whole, whole re remaking where it now has to. And actually this is a great report done by ULI and Ernst and young that we've, we have credit to them on this. They basically said the office is going to have a chance to prove that HR value after the pandemic.

00:24:32 And I thought that was a great way to, to think about it. That, you know, offices actually to be, have money and resources given to them, they have to have a relevance to the business to have to have a relevance to the people. And I think this is how they do it. So if you were going to advise operators on how to think about these typologies in terms of product mix,

00:24:58 messaging, marketing, any, what would you tell them? That's a big question. So, So here's, and this is really so, so number one, we've, we've been one of the leaders in tracking closures enclosures typically mean, Hey, as a, as an operator, we haven't found our fit. We haven't really, you know, been able to make it through.

00:25:23 And so I'll kind of bring some of that into that, into this as well. I think if you're going to build a hub space, if you, if you want to be a hub, it's really hard to do that outside of a few parts in your city, right? Because, because of the commute factor, it's gotta be really efficient for a lot of people to get there.

00:25:43 And a lot of, for example, a lot of our, our corporate portfolio of clients, we've looked at where their employees live and they're all spread out all. It's like, they're, it's not like they live in one suburb or whatever, it's just everywhere. And so if you're going to build a hub, it's really hard to do it outside of,

00:26:00 of a downtown or maybe a secondary downtown, depending on the city that you're in. So W with the downtown it's come back, There's no doubt. Yeah. And again, kind of city nerd speaking, like, you know, cities, the doom of cities has been, has been promised over and over and over and over again. And the truth is that they do come back.

00:26:22 Sure. There's hardship and challenge, but, but people want to be around people even, and I think post pandemic, there's going to be such a demand for, for that. We, we miss each other, right? Yes. I'm a city girl. Give me that city back any day, for sure. So if you, so if you're an operator and you want to be a hub,

00:26:41 you need, you need team and you need to be in one or two locations, you know, within that city. Right? So that's, that's, that's number one. You know, if you want to be, do you want it, same thing with connect spaces. Like if you want teams of four, six, 10 to come together, you can't be,

00:27:03 you know, far in one suburb, you kind of have to be in maybe slightly more locations than, than, than the hub might be. But it's also pretty limited. If you want to provide go spaces, this is a whole different thing. If you want to provide go spaces where people it's a respite for, for people getting out of their homes,

00:27:24 then you need to be close to where they are. So suburban spaces within a mile or so of where, where people live that, and that that pipe apology is that really it does exist in the suburbs, which is good. And one thing I I'd add, cause a lot of, a lot of the co-working operators that looked at the Regis model or the premier model as dated,

00:27:48 and a lot of, lot of us did prepare them. You're like, that's that product is dying. What we found is we did a lot of work on our pandemic demand. And what we found is even with the one-seat leads, that, that we were working in the one seat requirements, 71% of them went to private offices with a door. And so you look at like,

00:28:10 gosh, how did we just get so big? And the truth is that's the core of their product is that offering. And they offered them the suburbs and a lot of, a lot of cases. So, so I think, you know, whether you call that back to the future or whatever, these types of ghost spaces need to have private offices with doors,

00:28:30 and it's not necessarily, Hey, I want to go from my home office where I'm distracted to a coffee shop. What we hear a lot is I need a place. I can make zoom calls. I need a place I can have quiet. And, and, and I think that's what it goes space really looks like. And not to say it's totally Regis cause they're,

00:28:49 they're updates there. And they're great suburban providers that do that, that are not religious, but yeah, as you think about your, your mix and how you're laying out spaces also need to think about your location, but also the needs you're trying to meet. Yep. So for the suburban ghost space, what would be your mix recommendation? What percentage smaller private space versus open space?

00:29:15 Oh gosh. Yeah. I mean, I remember early days, one of the first coworking space I ever went to in 2010 was called galvanize and they're still still operating. And even at that time, there were lots of open spaces, big tables, surrounded by private offices. Everybody looking back 11 years later knows which ones were full. I would offices full even back then.

00:29:42 And these big, wide open areas where we're not people don't want to do that. So, so actual numbers, you know, to me, I think some operators do it really well where there's a, there's an open space. That's really near the entrance. That's kind of comfortable and loungy or call it like a, actually I heard this from a client this morning,

00:30:03 the living room you always wanted. Right. Right. The living room, like your background, I'm looking at, it's like the cool design that I am not cool enough to make happen in my house. Right. That's the living room you always wanted, maybe that, and that's where the kitchen is. Right. And that's, and maybe that's 10 to 20% of the space,

00:30:26 but the rest of it is private offices. And It doesn't have to look again, I'm looking at your background, which is the spaces and it's super hip and it's got great artwork that someone else chose. I'm in the middle of updating my home at home office. And there's so many decisions that I just, it takes me so long. I hate to admit that,

00:30:45 but it's like, I just, I would write, I'd be the guy who just like, I'm just going to go to the co-working space, who already designed this beautiful place and I don't have to pay all the things and then be stuck at home. Yeah. I think that's an important insight even on the sort of the ghost space, because all,

00:31:04 I hear a lot of operators talk about the opportunity to oversell open space. And I always say, don't assume you can do it until you do it. Don't, don't put that in your pro forma, because I think the galvanize, example's a good one. They think, oh, well these like tech and all these like freelancers are going to come in,

00:31:23 but only sometimes, and I'll sell three memberships for every seat that I have. That's open to get a lot of it. That's hard to do. I think you could oversell virtual memberships. Yes. Right? Exactly. Which we write, we love those. Yeah. It's tricky. But then the, you know, the build-out and you're bullish on management agreements because the trick with the ghost space model is it's expensive to build out right.

00:31:50 For an independent operator and put up all those walls and the HVAC and the, all the things, the electrical, the fire sprinklers, it's an expensive build-out. And so looking at that demand, and I know one of the things you talked about with seeing, you know, seeing that shift to ownership, getting involved in, you know, their own offering and partnering,

00:32:09 you know, and we preach at it a little bit about that, but I'd love to hear your prediction on, on that trend. So you and I talked before about that management agreements are complex for landlords. So I don't, I don't want to overstate management agreements, but I will talk about the other, the other side. So we're, we did a,

00:32:28 a piece in December about closures and we studied why certain locations closed, where they, where they big well-funded operators, where they small independence, where they in urban areas, where they in suburban areas, we're just about to release. We've now tracked over 700 closures in north America, which is that's a lot. And until you get the data set, you can learn a lot from it.

00:32:52 But one of the things I'll share from it is that nearly all the closures were in leased space, meaning operators who own buildings like expansive, for example, are not closing or franchisees where it's, that, that is their, that's the lifeblood of their business. That they're not closing. I mean, some of them did, but, and to some degrees,

00:33:15 small, small operators were not also the ones that closed. And we can go into more depth on that one. But what that tells me is that models that share the risk in whatever way that looks are actually are actually going to weather the storm a little bit better. And so that could mean that owners become the operator, which we've seen. We did a piece on that recently,

00:33:38 which I think is fascinating. And many of them will, whether franchise models grow, which we all know that that's happening. Management agreements are another one that, that is going to grow. I think this is really all about, it's all about risk and how you manage that. The downside of flexibility, which is what we saw during the pandemic. Yep,

00:34:00 absolutely. It's yeah, it's it, it's a challenging one to manage. And we've seen, I'm curious if you've seen this on this, on, on your platform. Part-time offices, office shares like the ultimate in flexibility. I'm not even going to get a candidate to my own office. I want to, you know, I want to share it.

00:34:18 I want to buy a block of time and seen a lot of folks do that based on demand. And you, again, we could do a whole episode on your perspective on, you know, pricing and responding to demand and shifts in demand. But the, the shared private offices is interesting because right, the model certainly works best when we can get folks to commit longer term.

00:34:42 Although we see what happens to that in a, in a pandemic and then to go to like office shares is really responding to a consumer demand, but harder for the operator sometimes. So to inform, I know, I know GWA is having conversations about this and, and a thought leader in this kind of fractional or, or two day a week space,

00:35:03 what we found. And I think this will, I think this will inform that discussion. All that is, you know, we're now starting in March, we started seeing the return of, of larger team demands. So tens twenties, thirties, fives, eights. And in that case, those are folks who are putting their, their whole team in a space.

00:35:23 If they're, if, if this was a survey, actually it's, the answer is so simple. It doesn't have to be a survey. But what I share is the percentage of those occupiers who are going to require that that team is in the space five days a week is zero. So that's, that's just the fact that zero. And so, and,

00:35:47 but here's the thing. They also want a private suite, right? So zero will be there all the time and they all want a private suite, right. They don't want to do this kind of flexible, you know, cause, cause again, they're there to connect. So the operators that can figure out how to deliver that are going to kind of take that next step.

00:36:08 It's really hard. I mean, I remember the first requirement we got like that it's it was for twenty-five person, entire company in Toronto, who said, we want our own suite with a door for all of us two days a week. And I only want to pay two days a week. Oh Out, oh, You'd be surprised at how hard that is to deliver.

00:36:28 We actually, we actually were able to deliver it for them, with an operator partner in Toronto. And that was really, really hard. And it's hard economically. It's hard on both sides. So that's far from solved at that size. I think it solves with day offices, you know, for, you know, single users who are used to picking up their stuff and leaving.

00:36:49 It's not all, I haven't seen a great solution and this would be a great one to follow up on because the demand is there. How I, how I think it will go, it will end up working out in pricing, which I know you hate, you hate talking about pricing. I hate talking about discounts. I love talking about pricing. It's going to work itself out in terms of pricing.

00:37:12 It is that it's a, it's a hard like physical space solution, but that makes it, that tends to move, move it into more. What's the agreement, right? What's what are people paying for? It how's it, how's it being priced. So those are, that's a really interesting and challenging next frontier topic for this industry, Right? This sort of consumer taking like flexibility to the next level.

00:37:38 Like I only want to pay for what I use, which I always use the gym model. I was pushed back and say, look, you don't get to pay per workout. Right? You need to buy a membership. So I like to stay strong a little bit on that. It's like, look, this is how the model works. Although right.

00:37:56 When you get into more creative partnerships with the, you know, management degree, you know, sometimes there's enough upside that you can, you can accommodate for some of that and do the team suites. I mean, that's the other piece, right? You need to have scale in order to have space for 25 people or you need to have a relationship with the landlord.

00:38:14 So you can kind of flex within the building, which I think we'll start to see happening. And that's going to be super interesting too. The really smart operators have kind of said, okay, if you're 10 people looking for a suite like that, you know, a couple of days a week, why don't you do a five-person and then five memberships essentially.

00:38:33 So, so essentially you've, you've, you're, you're saving that cost a little bit. We've got a commitment, a hundred percent of the time on that smaller space. So to me that that's, that's the solution we've seen work out the best for both sides at the moment. Yeah. Is there, is there anything else I want to be respectful of your time you would highlight from the demand side,

00:38:58 from what you're seeing? Yeah. I mean, I, I summarize what I've seen to where we're seeing requirements size grow again, Are those inquiries or those transactions Both. And I'll, I'll kind of, I'll speak to the timing of some of those a little bit too. So, so that the inquiries and transactions in Q3 Q4 of last year really dominated,

00:39:21 or I should say Q4 and Q1 were dominated by one and two seats. People just needed to get out of the house as the new year started March saw the return of larger kind of team requirements. And many of those are really, really seriously shopping, meaning they're, they're saying yes, we are ready to sign, but in specific markets, like more in specific markets that are ready.

00:39:45 So, you know, Denver market's like that. I don't want to forget our friends in Canada. Who's still in lockdown. Right. And so it's really different if you're sitting in Toronto or Montreal or Vancouver than Houston, Dallas, DC. Right. So, so that, that's the overall trend in demand. I think what we're seeing with teams is a lot of them are really starting to shop and they're targeting Q3 to actually move in.

00:40:21 Right. So, and what we've seen historically is that tend to be okay, summers over folks with kids, the kids are back in school. So now, so I think, I think we're seeing Q3 for that. We're also seeing that with enterprise, right? So a lot of enterprises is saying we're, we're comfortable having the conversation with our employees,

00:40:46 that we want them back and, and comfortable that they can be back in the vaccinations in that we'll be at a point where we can say that to them. So that that's kind of the timing that we're seeing as it relates to size. I think it's super helpful to have that perspective as operators. Cause again, you start to see what you're seeing,

00:41:04 but you want to know what's happening out there. And what are the leading indicators coming from? Some of the states that are further ahead meeting room. So do you, is your meeting room, product live? Are you starting to see that? What we found is we've got a great, we've got a great partnership in place for that now. So we've been servicing meeting room leads for,

00:41:27 for nine months, 12 months. A lot of our, our direct operator partners are wanting to us to serve a particular type of meeting or a, in more of a coworking or a creative kind of environment, as opposed to a executive suite environment. So we're working to kind of solve that for them. Some of our enterprise clients are really enjoying meeting room network type stuff.

00:41:51 So I think that's that's so yes, we're, we're handling that through a partnership today and we'll growing, growing that through our, our native network as well. Okay. Ben, we're going to have to do this again because I could, I been an Irish sort of chatting back and forth. He's like, we'll pick a couple highlights and I always think we can cover more than we can.

00:42:12 And I said, just so you know, I think my audience is just, you know, maybe not quite as nerdy as our Stanford grad and in economics and, but, but they love the data and they want to know they want that perspective of what's happening out there because we only have our own data. And so we'll share, and let me know specifically what to link to in the show notes,

00:42:34 I'll link to the typology article, LinkedIn up suite, and anything else that you want to share in terms of data sources that operators can access. I'll share that in the show notes so that folks can find it or wherever you want to send them. Why don't you, this be a good time we'll wrap up for now. We'll do another one, but yeah.

00:42:52 Tell us, you know, if operators want to know more about, you know, up suite and what you're offering best place to go. Yeah. A couple of things to look for. Soon after this gets posted, we did a piece on closures in commercial observer in December where we have 226 closures that we've tracked. We're now up to over 700,

00:43:13 we're going to release a piece, you know, week that, that updates that, and really we think it will be the most comprehensive look at how the pandemic has impacted the industry. So that looked for that in the next seven days by the end of the month, for sure. But also I think we're starting to think a lot about how we educate the,

00:43:36 the occupier side. And so we're writing a lot about how should occupiers, w we're all forecasting this big growth in demand in flex, but there's still some education that needs to be done. Those were attracting new, new and different types of occupiers than we have before. And so we're really focused on that as the market is, is thinking about coming back to the office.

00:43:59 And so we'll be publishing a lot about that in the coming months. And, and I know that's an interest to, to, to this group as well. Yeah. So hit the website. There's a lot of great content I'm on your email list. So you can subscribe to that and make sure you don't miss anything that comes out. So we'll put those links in the show notes.

00:44:17 We'll Ben, thank you. Great to get connected. Introduce you to my audience. I hope we can do this again. There will be lots to talk about in 2021, for sure. Thanks so much.

thing. coworking.com forward slash S E O cheat sheet. Okay, that's it for today. I will see you next week.

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